Today is Jan 1st 2023.

You are the commercial lender for NAIT Bank. Your longtime client Saxenda Inc Industries is a longstanding client of  9 years. Saxenda Inc is an incorporated company with their President on owner being Marvin O'Brien and has been in business for the last 11 years. Saxenda Inc develops gas-fitting devices for the Oil field industry. The company is in Ardrossan just east of Edmonton. They offer their customer 75 Days to settle accounts.

Saxenda Inc is looking to secure $850,000 in additional capital as they are looking to expand their current premises to accommodate a new client that they have recently secured. These funds would be used to buy a new machine with the most current level of technology to make the required fittings the client is seeking. They are expecting with this one new account to provide an increase of sales of 40% over the next 7 years. Marvin asked his new CFO Bill, to send you the financial statements that you requested. Bill sent over the unaudite financial statements to you. The audited financials are still with the accountant and will be available in a week or so, but Marvin is pushing to get this loan in place to buy the equipment.  Your assistant has collected the industry ratios for you. Bill the CFO has noted that sales have increased in the last three years due to Saxenda Inc's more aggressive selling approach.

Marvin is a good client, is eager, and wants to know your response quickly to their request of $850,000. 

 

SAXENDA INC	2022	2021	2020
CONSOLIDATED STATEMENTS OF OPERATIONS
Net revenues	3,261,058	3,952,798	4,196,177
Costs and expenses
Cost of good sold	1,385,949	1,482,299	1,762,394
Royalties	160,289	379,883	120,766
Product development	157,857	157,857	182,142
Advertising	388,066	411,091	415,422
Amortization of intangibles	16,028	37,988	12,076
Program production cost amortization	25,268	34,672	21,374
Selling, distribution and administration	609,817	616,636	692,369
Depreciation	307,631	327,291	389,069
Total expenses	3,050,905	3,447,717	3,595,612
Operating profit	1,145,272	505,081	-334,554
Non-operating (income) expense
Interest expense	$94,880	$70,105	$60,453
Interest income	-33,716	-29,353	-31,191
Other (income) expense, net	582	-3,866	13,072
Total non-operating expense, net	$61,746	$36,886	$42,334
Earnings before income taxes	1,083,526	468,195	-376,888
Income taxes	231,874	109,089	-88,945
Net earnings	$851,652	$359,106	($287,943)
Per common share outstanding	147,471	134,226	103,152
Net earnings Per Share	$5.78	$2.68	($2.79)
Basic	$5.73	$2.55	($2.43)
Diluted	$3.95	$1.58	($1.33)
Cash dividends declared	$0.87	$0.40	$0
SAXENDA INC BALANCE SHEET
PERIOD ENDING DEC 25TH 2022
(Thousands of Dollars Except Share Data)
	2022	2021	2020
ASSETS
Current assets
Cash and cash equivalents	$887,275	$1,174,158	$917,385
Accounts receivable, less allowance
for doubtful accounts of
$33,068 in 2021,
$50,075 in 2020,
and $58,483 in 2019.	446,875	695,494	835,475
Inventories	336,776	396,841	384,974
Prepaid expenses and other current assets	233,152	310,927	303,064
Total current assets	$1,904,078	$2,577,420	$2,440,898
Property, plant and equipment, net	$236,390	$368,203	$360,401
Other assets
Goodwill
Other	767,464	797,776	901,005
Total other assets	1,334,153	1,513,726	1,654,571
Total assets	$3,238,231	$4,091,146	$4,095,469
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings	$430,684	$527,757	$458,692
Accounts payable	327,061	474,572	475,074
Notes Payable	184,579	229,104	274,396
Total current liabilities	$942,324	$1,231,433	$1,208,162
Long-term debt	$809,557	$1,120,974	$1,077,108
Other liabilities	297,917	343,656	352,210
Total liabilities	$2,049,798	$2,696,063	$2,637,480
Shareholders' equity
Preference stock of $2.50 par value. Authorized
5,000,000 shares; none issued	-	-	-
Common stock of $5.22 par value. Authorized and 2020 300,000  shares; issued 147,471 shares in 2020	769,798	700,659	538,453
Additional paid-in capital	-236,425	305,784	553,739
Retained earnings	840,824	117,472	-187,943
Accumulated other comprehensive (loss) earnings	-185,763	271,167	553,739
Total shareholders' equity	1,188,433	1,395,083	1,457,989
Total liabilities and shareholders' equity	$3,238,231	$4,091,146	4,095,469
Ratios	Industry Standard
Net Profit Margin	5.35%
Return on Assets	7.15%
Return on Equity	17.70%
AVG Days Payble	58.6 Days
Inventory Turnover	4.2 X
Accounts Receivables DSO	51 Days
Current Ratio	1.83 X
Quick Test Ratio	1.47 X
Debt to Assets	96%
Debt to Equity	69%

NEED ANSWERS OF : 

NEEDE EXCEL FORMULAS 

	Year 2022_	Year 2021	Year 2020_	Industry Avg	Trend Analysis
Net Profit Margin	26.2
Return on Assets	$35
Return on Equity
Average Days Payable
Debt to Assets
Debt to Equity
Accounts receviable DSO
Inventory Turnover
Working Capital
Quick Ratio
Current Ratio

: DECRIDE ALL FIVE C'S CREDITS ? 

CAPACITY, CAPITAL ?

: What documentation would you request from the owners to ensure compliance of your credit file? List three items